Highway authority re-awards contracts, has to fund them itself

New Delhi, Nov 22 | Updated: Nov 23 2005, 05:46am hrs
The National Highway Authority of India (NHAI) has re-awarded three contracts pertaining to the north-south east-west (NSEW) corridor, which had been terminated earlier this year. The three contracts are amongst the six bids which NHAI awarded during October 2005.

However, the downside is that all the six contracts are EPC (engineering and procurement and construction) contracts. This means that though NHAI has found takers for implementing the works, it would have to fund the projects from its own pocket.

Of the six stretches, four come under the east-west (EW) corridor, while the remaining two are under the north-south (NS) corridor. NSEW is the second phase of the national highway development programme (NHDP). Sources say that due to lack of any takers, NHAI had to go in for EPC contracts. In fact they go on to point out that three of the six stretches pass through Bihar, which has always been a problem region for the highway projects.

The three stretches which have been re-awarded are Panchhi Gujran to Kamaspur (21.7 km) worth Rs 75 crore and Haryana/Delhi border to Mukarba crossing on NH-1 (13 km, worth Rs 93 crore). Both these stretches come under the NS corridor, and had been earlier terminated by NHAI. The third stretch to be re-awarded comes under EW. This is the 25 km Siliguri-Islampur stretch.

The remaining three stretches, which were awarded last month are Darbhanga-Muzaffarpur (NH-57), which is in two packages. The first package covers 30 km of the entire stretch and is worth Rs 335 crore. The second package is 40 km long and is worth Rs 323 km. This is counted as two contracts, though both have gone to the same bidder.

The Siliguri-Islampur stretch of 26 km on NH-31 and worth Rs 211 crore is the other stretch to have been awarded last month. All these three stretches come under the EW corridor.

A senior official said that due to law and order problems in Uttar Pradesh and Bihar, companies are sceptical about picking up projects related to these areas. Sources say that even during the implementation of the Golden Quadrilateral (GQ, phase one of NHDP), there were reports of unscrupulous elements interfering in the projects, discouraging companies to bid for them. Thus, NHAI has gone in for EPC contracts.

There are a total 197 projects under NSEW, of which 54 are yet to be awarded, while 101 are at various stages of implementation.

Keeping this in mind, the government has rescheduled NSEWs deadline and shifted it a year later to December 2008 from the original. Sources said that with most of the NSEW projects projected to end by December 2008, it would have been impossible for NHAI to finish NSEW by December 2007. In such a scenario, it would have to wrap up the remaining projects quite fast, even if it means going in for EPC contracts.